South Africa’s five biggest risks in 2024

The World Economic Forum (WEF) has highlighted an energy supply shortage as the biggest risk South Africa faces in 2024.

In its Global Risks Report for 2024, the WEF released the top five risks as identified by the Executive Opinion Survey for every country in the world.

For South Africa, these five risks are:

• Energy supply shortage
• Economic downturn
• Unemployment
• State fragility
• Water-supply shortage

South Africa is not unique in facing energy supply shortages, as over 40 countries in the report, including the United States, Germany, Iraq, and Mexico, have this risk in their top five.

Economic downturn and unemployment are also common risks listed in the report.

However, South Africa is one of only 17 countries facing the risk of state fragility in 2024. 

The WEF’s assessment of South Africa’s risks mirrors that of Allianz in its annual Risk Barometer, which compiles the views of over 3,000 risk management experts worldwide.

The Barometer identified infrastructure collapse as the biggest risk facing South African companies in 2024.

Globally, cyber incidents such as ransomware attacks, data breaches, and IT disruptions are the biggest worry for companies globally in 2024. 

Business interruption ranks second, followed by natural catastrophes and changes in legislation and regulation. 

Fire and explosions, political risks and violence are the biggest risers in the compilation of the top global business risks.

South Africa is very unique in facing the threat of infrastructure collapse, which is the number one risk for the second year running. 

According to Allianz, this highlights the severe impact of power outages and the failure of essential infrastructure, such as ports, railways, and roads, on the economy and businesses. 

The closely related risk of the energy crisis has climbed to the fifth position, up from sixth place in 2023, indicating that little progress has been made in tackling the issue. 

Cyber incidents and business interruption continue to hold the second and third spots, respectively.

“The persistent threat of power outages and infrastructure failures poses significant challenges to businesses, disrupting supply chains and impacting the overall economy,” said Allianz Commercial South Africa CEO Thusang Mahlangu. 

“The report underscores the urgent need for investment in infrastructure resilience and the development of contingency plans to mitigate the potential consequences of blackouts.”

WEF’s global risks

Below are the WEF’s global risks ranked by severity over the short and long term.